Nucor Corp (NUE)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days 70.01 70.66 71.98 76.14 75.69 70.36 73.38 71.14 68.62 75.52 84.34 84.12 86.18 89.50 92.51 86.91 72.73 65.88 66.44 71.79
Days of sales outstanding (DSO) days — — — — — — — — — — — — — — — — — — — —
Number of days of payables days — — — — — — — — — — — — — — — — — — — —
Cash conversion cycle days 70.01 70.66 71.98 76.14 75.69 70.36 73.38 71.14 68.62 75.52 84.34 84.12 86.18 89.50 92.51 86.91 72.73 65.88 66.44 71.79

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.01 + — – —
= 70.01

The cash conversion cycle measures how efficiently a company is able to convert its resources into cash flow. For Nucor Corp, the cash conversion cycle has fluctuated over the years from a high of 92.51 days in June 2021 to a low of 65.88 days in September 2020. This variability indicates potential challenges in managing the company's working capital effectively.

In general, a shorter cash conversion cycle is preferred as it suggests that the company is able to quickly turn its investments in inventory and accounts receivable into cash. On the other hand, a longer cash conversion cycle could indicate inefficiencies in the company's operations or challenges in collecting payments from customers.

Nucor Corp's cash conversion cycle has shown some improvement in recent periods, with the cycle declining to around 70 days or less in the most recent quarters. This may indicate enhanced working capital management practices, such as more efficient inventory turnover or quicker accounts receivable collection.

Overall, analyzing Nucor Corp's cash conversion cycle provides insights into the company's liquidity and operational efficiency. It is important for investors and stakeholders to monitor this metric over time to assess the company's ability to manage its cash flow effectively.